Apple TV+ pricing overshadows iPhone 11

Apple unveiled three new iPhones on Tuesday and surprised investors with a $4.99 price plan for its TV+ service, undercutting competition from Netflix and Disney in the already crowded field of streaming content

Filmed and written by Patrick McGee. Additional footage from Reuters. Edited by Paolo Pascual.

Transcript

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TIM COOK: Next up, let's talk about Apple TV+.

[APPLAUSE]

PATRICK MCGEE: The star of Apple's Hardware Keynote on Tuesday was not its new flagship phone, but an aggressive pricing strategy for its streaming TV service. The three new iPhones unveiled by Tim Cook and company on Tuesday included a triple lens iPhone, 11 Pro, but the features merely met expectations.

What surprised the audience, and sent shares of Roku, Disney, and Netflix tumbling, was the $4.99 monthly pricing point for Apple TV+, about half the price expected by analysts, and about one third the price of premium HBO now.

CAROLINA MILANESI: Because I don't think that anybody was expecting such an aggressive price point. But I would say two things. One is that you make, now, a service not a choice between Hulu, or Disney, or Netflix. You make it easier for people to say, you know what? It's a cup of coffee at Starbucks. So it's a much easier thought process, when it comes to purchase.

And the other one is that I don't think there's a negative brand connotation in being aggressive on a services price point.

TIM COOK: All of these incredible shows for the price of a single movie rental. This is crazy.

PATRICK MCGEE: Apple also showcased a new 10.2 inch iPad, with enhancements for productivity as well as gaming, through its new Arcade service. The Apple Watch got an update, too. The Premium Series 5 Titanium model, starting at $799, dollars plus new bands from Hermes.

But the hardware improvements, even when impressive, we're not wholly unexpected or marks of a new breakthrough. By contrast, how Apple is using its balance sheet to find a position in TV streaming caught many off-guard, with Roku shares tumbling 10.5% and Netflix shares dropping 2.2%.

Apple will deny it, because the iPhone is still its most important product, but this might just have been the first post-iPhone hardware keynote.

BEN WOOD: I think we've seen a trend towards the importance of the iPhone diminishing over the last few of these events. However, I think this is the most palpable event, where we see Apple concentrating on the broader portfolio, the blend of software, hardware, and services.

PATRICK MCGEE: Prices of smartphones has been creeping up in recent years, as the market matures. With less room for unit growth, manufacturers have been trying to make up for it in higher prices. But on Tuesday, Apple's shift in strategy was palpable, even if the technology improvements were modest.